Public Finance and Audit (Miscellaneous) Amendment Bill

by Vickie Chapmanon July 31, 2018

Second Reading

This bill proposes to improve the timeliness and effectiveness of reporting by the Auditor-General and to simplify publication and administration. I place on the record my appreciation for the work of the Auditor-General and his office in service to this parliament and, of course, to ensure that we are kept informed as to his work and that of his office and, in addition to that, how we might improve his statute.

Currently, the Auditor-General's Report must be tabled on the next sitting day and then only after the report is tabled can it be published. The bill proposes to allow the Auditor-General to publish a report after it has been delivered to the President of the Legislative Council and the Speaker of the House of Assembly. If either the President of the Legislative Council or the Speaker of the House of Assembly is absent, the bill proposes to allow the Clerk of the relevant house to receive a report on behalf of the President or the Speaker, as the case may be.

I interrupt myself to say that I do not think I have actually specifically consulted with the Clerk about this onerous new responsibility that we are giving him or her in that position, but I am sure that they will welcome it.

The effect of this amendment is that the Auditor-General will be able to publish a report, regardless of whether or not the parliament is sitting. This addresses a key concern of the Auditor-General, documented in his annual report tabled in parliament on 17 October 2017. This bill follows a bill that covered similar matters in the Public Finance and Audit (Auditor-General's Reports) Amendment Bill 2017, which I introduced when in opposition and which sought to address the Auditor-General's concerns. That bill was not passed before the parliament was prorogued, more is the pity, but, nevertheless, we are back here to remedy that.

The bill also proposes a number of simplification measures and I will quickly outline those. The first measure will allow the Auditor-General to annex documents to its report, which will reduce the burden of publishing his annual report to parliament, which currently can be in excess of 3,000 pages. Under the proposed amendments, these annexures will be available to parliament on a website determined by the Auditor-General.

The second measure will require the Auditor-General to publish on a website audited financial statements of the public authorities and the financial statements of the administrative unit established to assist the Auditor-General. This is a significant accountability measure that ensures that all audited financial statements of public authority will, for the first time, be available on a website determined by the Auditor-General.

The third measure will allow the Treasurer to delegate his power under the Public Finance and Audit Act to open, close and maintain deposit, special deposit and imprest accounts. This administrative function is considered low risk and will enable more efficient administration to support machinery of government and other strategic decisions of government.

As a matter of housekeeping and at the request of the Auditor-General, the bill proposes to adopt terminology about audit that is consistent with current auditing standards in Australia and New Zealand. The term 'efficiency and economy' in the context of undertaking an audit has been redefined in auditing standards and other audit acts across Australia and New Zealand as 'efficiency, economy, and/or effectiveness'. This change has been included in the bill, noting that the 'and/or' device is not used in legislative drafting and that, in the context in which the phrase is used in this bill, the use of 'and' is sufficient.

In preparation of these proposed amendments, the government has consulted with the Auditor-General, who supports the amendments. The government considers that these proposed amendments will ensure that this government is transparent in its financial reporting and further provide the Auditor-General with the appropriate legislative framework to ensure timely and full disclosure of the results of their inquiries to the people of South Australia.

I seek the opposition's support for these amendments, which will ultimately improve the relevance of the Auditor-General's annual report to parliament and ensure that timely access to this information and agency financial statements is available to parliament and all South Australians. I am sure members would be aware that this is a bill which has already passed the Legislative Council, and we thank them for their consideration of the bill and passage of the same. I seek leave to have the explanation of clauses inserted without my reading it.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Public Finance and Audit Act 1987

4—Amendment of long title

This clause amends the long title to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

5—Amendment of section 8—Special deposit accounts

This clause amends section 8 so that the power of the Treasurer to establish and maintain a special deposit account, and the power to approve a purpose of, or relating to, a government department for the purposes of section 8, can be delegated by the Treasurer.

6—Amendment of section 9—Imprest accounts

This clause amends section 9 so that the power of the Treasurer to establish an imprest account can be delegated by the Treasurer.

7—Amendment of section 21—Deposits

Section 21 provides that money accepted by the Treasurer on deposit from a person must be recorded in a separate account maintained by the Treasurer. This clause amends the section to enable the Treasurer to delegate the power to establish and maintain accounts.

8—Amendment of section 31—Audit of public accounts etc

This clause amends section 31 to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

9—Amendment of section 32—Examination of publicly funded bodies and projects and local government indemnity schemes

This clause amends section 32 to delete the phrases 'efficiency and economy' and 'efficiency and cost-effectiveness' and instead refer to 'efficiency, economy and effectiveness'.

10—Amendment of section 33—Audit of other accounts

This clause amends section 33 to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

11—Amendment of section 36—Auditor-General's annual report

This clause allows the Auditor-General to annex documents to the annual report (including the documents that are currently provided to Parliament with the annual report) and to annex them by including a reference to a website on which they are, or are to be, published. The reference in subsection (3) to a single supplementary report is changed to allow for multiple other reports. The provision also allows for the Clerk of a House of Parliament to receive a report on behalf of the President or the Speaker (as the case may be).

12—Amendment of section 37—Recommendations by Auditor-General

This clause amends section 37 to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

13—Amendment of section 38—Reports and other documents to be tabled before Parliament and published

Section 38 is amended to make consequential amendments and to allow the Auditor-General to publish a report on a website, or in some other manner, once it has been delivered to the President of the Legislative Council and the Speaker of the House of Assembly under the Part. If, however, the day after delivery of the report is a Parliamentary sitting day, the Auditor-General must not publish it until the report has been laid before a House of the Parliament. The proposed amendments also require that the Auditor-General ensure that audited financial statements that were not annexed to the annual report are published as soon as reasonably practicable after the annual report has been laid before a House of the Parliament.

14—Insertion of section 42

Proposed section 42 applies where the Treasurer delegates a power under the Act. The delegation—

may be to a specified person or to a person occupying or acting in a specified position; and

must be in writing; and

may be absolute or conditional; and

does not derogate from the power of the Treasurer to act in a matter; and